FuelCell Energy today
(As of 12/24/2024 5:19 PM ET)
- 52 week range
- $5.45
▼
$55.20
- Target price
- $10.23
FuelCell Energy Company NASDAQ: FCEL There were a lot of positive details in the 2024 fourth quarter report, but the end result wasn’t very good. The company is struggling to gain momentum, with losses continuing to mount and short interest rising, likely pushing the market lower. Short interest rates, which topped 25% at the end of November, rose 20% sequentially, helping cap the market’s gains in December. However, the real danger is shareholder dilution. Dilution in the fourth quarter approached 2 million shares and increased the average number of shares by 35% year-over-year, resulting in lower shareholder value.
With fourth-quarter results providing no reason to buy the stock and downward pressure on price action, the question becomes how low the stock can go, and the answer is zero. A transition to zero is unlikely; the company has value but struggles to unlock it. A more likely scenario is a retest of recent lows, well around 40% below critical resistance on a pair of moving averages.
FuelCell Energy Reports Mixed Fourth Quarter Results
FuelCell Energy reported mixed results for the fourth quarter, with revenue topping expectations and losses topping expectations. The company’s revenue grew 120% YoY to $49.3 million, with growth across all segments. Electricity generation, a real opportunity, grew by 40% to account for almost 25% of the total. It is growing due to the launch of projects and will provide a stable income over time.
FuelCell Energy Stock Forecast Today
$10.23
-1.45% MinusReduce
Based on ratings from 6 analysts
| High forecast | $13.75 |
|---|---|
| Average forecast | $10.23 |
| Low forecast | US$5.00 |
FuelCell Energy Reserve Forecast Details
However, revenue is supported by one major client and no new wins have been identified. A major client is Gyeonggi Green Energy in South Korea, which is part of a deal the market has known about for years. Similarly, growth in the services segment was driven by module exchanges, which are unlikely to be repeated regularly due to low customer base and module lifespan. The average fuel cell can last more than 2.5 years with continuous use and up to 3 years or longer, depending on the model and configuration.
Margins are exceptionally bad. The company’s gross losses rose more than 600% YoY to more than $10 million, operating losses rose 12% to $41 million, and GAAP loss per share rose 5% despite higher numbers. The per-share loss beat analysts’ consensus estimates reported by MarketBeat by $0.47, or 2,700 basis points, raising questions about the company’s financial health. The balance sheet is capitalized, but cash and assets are shrinking, debt and liabilities are growing, and free cash flow will only last three quarters at the fourth-quarter burn rate. This means the company will need to raise more capital in 2025, likely through stock sales or other dilution, and may need additional capital in 2026.
The gap in FuelCell is growing; Restructuring in progress
FuelCell Energy’s backlog increased compared to the previous year, but did not bring growth to the market. The increase in backlog is small and is due to the same large client mentioned earlier. With no new customers in sight, the outlook has not changed and all that remains is cash burn and dilution. However, the company is restructuring, so there is hope. The company plans to focus on core technologies, including power generation, to support networks and data centers. Entering the data center market would be a big win for this business. Data centers are starved for energy, consuming more energy as they grow in size and technology, and are turning to clean energy sources to meet their needs.
FuelCell Energy broke the trend, but there will be no reversal
FuelCell Energy’s share price broke its downtrend in November, but a reversal is unlikely. Post-release action confirms resistance from critical moving averages that are showing bearish behavior among short-term traders and long-term investors. The most significant potential support target is the recent bottom, which could be reached quickly. If support is confirmed at this level, FCEL stock is likely to move sideways within the trading range until more news emerges. Otherwise, this stock could fall below $5.65 and continue its downtrend into 2025.
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